LSE - Stanford - Universidad de los Andes

Long-Run Development in Latin America

2nd annual conference, 16-17 May 2018

The Latin America and Caribbean Centre (LACC) hosted the second annual LSE-Stanford-Universidad de los Andes conference on long-run development on 16-17 May 2018, with support from the LSE Annual Fund, International Growth Centre (IGC) and STICERD.

Following our inaugural conference in Stanford in May 2017, this multi-disciplinary event came to the LSE to probe the institutional, political, and economic drivers of long-run development. The majority of papers focused on Latin America, but with important comparative research from Africa and Asia.

Recent years have seen a powerful resurgence in the political economy literature on development. Ideas about the role of institutions vs. factor endowments vs. human capital in driving economic growth and inequality have been advanced forcefully, and have been tested in a variety of contexts. The boldness of some of the assumptions and constructs (e.g. ‘colonial mortality’, ‘inclusive vs. extractive institutions’, AJR 2001, etc.; ‘institutional contagion’, ES 1997) have been challenged both on the ground of whether the empirical findings have the necessary nuance, and whether they are able to distinguish between key dimensions of the package of ‘institutions’ studied. The literature remains rich and provocative. The institutional intuition remains the main driver of various explanations, but “institutions” are often too high a level of aggregation for empirical tests to be fully convincing versus alterative theses.

Cross-country studies with creative identification strategies, and working with more disaggregated dependent and independent variables, are shedding new light on these debates. In our view, some of the methodologically most robust approaches involve subnational analysis exploiting subnational variation. Latin America offers an ideal context in which to develop such research, with huge variation across space and time in economic and human development outcomes, and also subnational institutions, human capital, public investment, factors and resources, and other political and geographic variables. In contrast to other developing regions, Latin America offers comparatively high-quality data, often available across very long periods of time.

New research by young scholars has taken up the challenge with preliminary results that are impressive and have a clear potential to remake the political economy of development. Examples of such work include Dell (2008), Díaz-Cayeros and Jha (2012), Guardado (2016), Alix and Sellars (2016), Faguet, Sánchez and Villaveces (2016), Galán (2011), Naritomi et al. (2012), and Stasavage (2014) among others. Such studies typically use panel data from hundreds of observations across decades or centuries. When these units are subnational, the researcher can control much better for historical, macro-institutional, geographic, cultural, and other factors that bedevil identification in cross-country studies. The empirical quality and specificity of such an approach facilitates an analytical focus on complex, nuanced explanatory factors that are hard to treat in a cross-country context. Just as excitingly, efforts are currently underway to extract data from the early republican and colonial archives in several Latin American countries, and so develop much longer-term subnational databases over not decades but centuries.

The time is ripe to bring together research that serves simultaneously as major substantive findings, and also proof-of-concept for new empirical approaches. The LSE-Stanford-Uniandes conference seeks to explore more directly how long-run development patterns are driven by state capacity, land rights, and race/ethnicity and civic and political rights. We believe that political economy of Latin America work is on the verge of a major breakthrough in new approaches that will generate collaboration between historians, political scientists, economists and other social science scholars that will produce a new understanding of some of the most complex social issues of our time.